Sources: Former Pa. Treasurer McCord wore wire while in office

(FILE) Former Pennsylvania State Treasurer Rob McCord walks from the U.S. District Court in Harrisburg, Pa., on Tuesday, Feb. 17, 2015.

(FILE) Former Pennsylvania State Treasurer Rob McCord walks from the U.S. District Court in Harrisburg, Pa., on Tuesday, Feb. 17, 2015. (Matt Rourke / AP)

Angela CouloumbisOf The Philadelphia Inquirer (TNS)

Sources: Former Pa. Treasurer McCord word wire while in office

Former state Treasurer Rob McCord secretly cooperated with federal prosecutors in a corruption investigation while in office and wore a body wire to record conversations with others, The Philadelphia Inquirer has learned.

He surreptitiously recorded, among others, a major donor to Pennsylvania politicians whose company made millions helping to invest the public's money, four people familiar with the matter said.

McCord, who pleaded guilty to attempted extortion in February 2015 but whose sentence has been delayed for months, wore the wire before he entered his plea. He agreed to cooperate after prosecutors confronted him with his own words as contained in 2,000 wiretapped conversations.

Enlisting the clandestine help of such a high-ranking elected official was a coup for the FBI and the U.S. Attorney's Office in Harrisburg.

While undercover, McCord taped at least one big political donor — Richard W. Ireland, whose King of Prussia firm has made money from numerous government funds, the four sources said.

Ireland, who has not been charged with any crime, has been mainly a donor to Republicans, though his firms and employees gave generously to McCord. While McCord was a leading Democrat, his dealings with Ireland showed his ability to cross party lines and demonstrated the sweep of his contacts.

Ireland's lawyer, Joshua Lock of Harrisburg, said Wednesday his client never discussed anything illegal with McCord.

"If he had conversations with anyone about wrongdoing, it was not with Dick Ireland," Lock said. "If he had recorded conversations with Mr. Ireland, he wasted the 25 cents he spent on the phone call."

U.S. Attorney Peter J. Smith, the top federal prosecutor in the Middle District of Pennsylvania, declined to comment.

McCord and his lawyer, Robert E. Welch Jr., a former assistant U.S. attorney in Philadelphia, also declined to comment.

Prosecutors and the U.S. Securities and Exchange Commission have gathered up records about Ireland's Valley Forge Investment Corp., the sources said. The firm has marketed investment businesses to government officials and then shared in the proceeds when the businesses got public contracts.

One of the companies it marketed was paid more than $5 million in fees while McCord was treasurer, records show. The firm, in turn, was to pay Ireland's corporation fully half that amount, according to state treasury documents.

McCord's time working undercover appears to have been limited. Federal authorities first confronted him in late 2014, and he wore the taping device for only a few weeks before he suddenly announced in January 2015 that he was resigning from office early in his second term, according to people familiar with the investigation.

In an awkward two-step last year, McCord originally said only that he was quitting his government job midterm to return to the private sector. He made no mention of legal trouble.

But the next day, he abruptly revealed that he would soon plead guilty in a deal worked out with federal prosecutors.

People familiar with the matter say the original plan was for McCord to return to private life without any acknowledgment that he was facing federal prosecution. Prosecutors apparently had hoped to continue using him as an informant.

But McCord insisted on going public after he grew irate over a 6ABC news story that reported — correctly — that he was under investigation, but said — incorrectly — that he had looted money from his campaign fund.

In fact, the wealthy politician's admitted wrongdoing did not involve enriching himself, but illegally squeezing donors for campaign cash while seeking the Democratic nomination for governor in early 2014.

According to court documents, McCord at one point lamented that some donors had failed to contribute sufficiently, saying that even if he lost the primary, "at the very least, I'm still going be the freakin' treasurer. What the hell are they thinking?"

At another point, McCord told a lawyer for a firm: "Every time you are trying to get something done through state government, you are going to have the state treasurer looking to screw you."

McCord pleaded guilty to two counts of attempted extortion on Feb. 17, 2015. Unusually, 14 months later, he has yet to be sentenced — a sign that he and prosecutors are waiting to see how his cooperation plays out before his fate is weighed.

No date has been set for sentencing, and the judge in the case recently set an October date for a status hearing, a session the judge said would be open only to prosecutors and the defense.

Federal prosecutors have been on overdrive in recent months, winning seven guilty pleas in an undercover "pay-to-play" investigation that appears to be aimed at Allentown's mayor and Reading's former mayor.

In a probe run by prosecutors in Philadelphia, Allentown political consultant Mike Fleck similarly recorded conversations for several months in 2015, The Morning Call has reported.

Fleck pleaded guilty to corruption last week. One of his many political clients was McCord, who hired him for advice during McCord's unsuccessful bid for the 2014 gubernatorial nomination.

McCord, 57, graduated from Lower Merion High School and then from Harvard University. After earning an MBA degree from the University of Pennsylvania, he worked for an investment firm specializing in high-tech ventures before winning his first term as state treasurer in 2008. He was bright, ambitious, talkative and personable.

McCord easily won a second term in 2012. Two years later, he ran for governor, but lost to Tom Wolf in a bruising primary.

Even though McCord spent heavily during the race — lending himself $2.2 million — he still came in a distant third, trailing U.S. Rep. Allyson Y. Schwartz.

During the expensive contest, among McCord's more generous supporters were businesses and employees associated with business partners Ireland, 79, and Brian McElwee, 67, two longtime major donors from the Main Line who have kept a determinedly low profile over the years. As McElwee told The Associated Press in 2008, "We don't talk to reporters."

Over the last two decades, they have given nearly $2 million to candidates and committees at the national, state and local levels, ranging from the failed presidential bid of Florida Sen. Marco Rubio to the campaigns of candidates for Philadelphia City Council.

In late 2014, federal investigators in the McCord case issued subpoenas for information about Valley Forge Investment, a business Ireland and McElwee founded.

Three weeks ago, the SEC, which has joined the FBI and IRS in the investigation, also subpoenaed documents involving Ireland, according to two people familiar with the investigation.

Alarmed by pay-to-play scandals nationwide, the SEC has imposed a series of rules that bar financial professionals from contributing to politicians in an effort to win contracts.

For years, Valley Forge Investment had referred firms — notably one named Valley Forge Asset Management Corp. — to government officials who invest pension funds, tobacco settlement money or tax receipts. In return, Valley Forge Investment was paid a percentage of the fees.

In Chester County, the firm's take at one time was 30 percent, records show. The money was paid by Valley Forge Asset Management, which had been referred to manage the county retirement fund.

While helping line up government contracts for Valley Forge Asset Management, Ireland and McElwee have remained big campaign contributors.

McElwee gave a McCord campaign fund $25,000 in 2012. The following year, the chief operating and financial officers of Valley Forge Investment gave the treasurer a total of $100,000, records show.

At the same time, financial professionals with Valley Forge Asset Management appear to have little involvement in making state and local campaign donations.

Records show that Ireland and McElwee referred Valley Forge Asset Management to state treasurers dating back to at least 2001. While its state business increased markedly during the McCord administration, it still fell short of its peak under previous treasurers.

After McCord agreed to cooperate with the federal investigation, he had a series of conversations with Ireland, recording them for the FBI, according to people familiar with the matter. They said one key recorded session took place during a long lunch the two men had.

A dozen years ago, Ireland and McElwee's giving ran afoul of the law in Ohio, where officials said a $370,000 donation they made to a PAC far exceeded the state limit of $5,000 per person. The PAC, in turn, gave money to GOP groups supporting Ohio's Republican state treasurer.

The treasurer, for his part, had awarded a contract to Valley Forge Asset Management to manage millions in public money. Thirty percent of its fees were paid to Ireland and McElwee's firm.

In the end, Ohio officials ordered the PAC to return the men's donations.

"They are a Pennsylvania PAC that had every intention of abiding by Ohio law," a lawyer for the PAC said at the time. "They were given some bad advice and now we're trying to straighten it out."